3104AFE STATEGIC MANAGEMENT ACCOUNTING
INDIVIDUAL ASSIGNMENT

Assessment weight: 10%
Due date: 18th MAY 2015, 8:00 am

1. SUBMISSION
All submissions should be made on line which is a requirement under University Policy. No hard copies will be accepted. The submission point can be found under the “Assessment” option of the course web site at Learning @ Griffith.
Your submission should be in a Microsoft Word format file.
You must attach a standard cover sheet to your assignment. A copy of a standard coversheet is given under the “Assessment” option of the course web site at Learning @ Griffith.
2. NOTE
To be fair by all the students in this course:
1. No extensions will be granted.
2. Convenors/ tutors will not give any individual feedback/help/clarification on the work prior to submission. Any information relating to the Assignment will be posted on the web or announced in the lectures so that everybody gets the same information.

3. ASSIGNMENT
This assignment is marked out of 100. It has a 10% weight on your final assessment.
The Defence Department has the difficult decision of deciding which military bases to shut down. Military and political factors obviously matter, but cost savings are also an important factor. There are two naval bases located in New South Wales – one in Nowra and the other in Balmoral. Based on the military and political considerations the Navy has decided that it needs only one of those two bases permanently, so one must be shut down. The decision regarding which base to shut down will be made on cost considerations alone. The following information is available.
1. The Nowra base was built at a cost of $100 million. The operating costs of the base are $400 million per year. The base is built on land owned by the Navy, so the Navy pays nothing for the use of the property. If the base is closed the land will be sold to developers for $500 million.
2. The Balmoral base was built at a cost of $150 million on land leased by the Navy from private citizens. The Navy can choose to lease the land permanently for a lease payment of $3million per year. If it decides to keep Balmoral base open, the Navy plans to invest $60 million in a fixed income note, which at 5% interest per annum will earn the $3million per year the government needs for lease payments. The land and buildings will immediately revert back to the